1972 (11) TMI 101 - HC - Indian Laws

Summary

Issues Involved:
1. Jurisdiction of the District Judge under Section 31 of the State-Financial Corporations Act, 1951.
2. Applicability of the Code of Civil Procedure in proceedings under Section 31 and Section 32 of the Act.
3. Investigation of the petitioner's objections and circumstances by the District Judge.
4. Maintainability of the petition under Article 226 of the Constitution despite the availability of an alternative remedy.

Issue-wise Detailed Analysis:

1. Jurisdiction of the District Judge under Section 31 of the State-Financial Corporations Act, 1951:
The petition was filed against an order by the District Judge, Indore, directing the sale of the petitioner's property to recover the amount due to the respondent. The respondent had filed an application under Section 31 of the Act for the sale of the petitioner's mortgaged property due to default in payment. The District Judge had refused to investigate the petitioner's circumstances, leading to the confirmation of the order of attachment and directing the sale of the property.

2. Applicability of the Code of Civil Procedure in proceedings under Section 31 and Section 32 of the Act:
The petitioner contended that the District Judge had broad jurisdiction under Section 31 and was bound to investigate the facts and circumstances, including the petitioner's defenses, in accordance with the Code of Civil Procedure (CPC). The respondent argued that the District Judge's role was limited to investigating the Corporation's claim and that the CPC applied only to procedural aspects of the inquiry. The court noted that Section 32(6) of the Act mandates that the District Judge investigate the claim of the Financial Corporation in accordance with the CPC, implying a comprehensive investigation, including the petitioner's defenses.

3. Investigation of the petitioner's objections and circumstances by the District Judge:
The court emphasized that the term "claim" in Section 32(6) includes the sum-total of facts alleged by the Corporation and the relief sought, thus encompassing the petitioner's defenses. The District Judge should have investigated the petitioner's objections and circumstances under Order 20, Rule 11 of the CPC. The court cited precedents, including AIR 1972 SC 801 and AIR 1972 Pat 83, to support the applicability of the CPC in such proceedings and the need for a thorough investigation of the petitioner's defenses.

4. Maintainability of the petition under Article 226 of the Constitution despite the availability of an alternative remedy:
The respondent argued that the petition should be dismissed as the petitioner had not availed the alternative remedy of appeal. The court referred to AIR 1971 SC 33, where the Supreme Court held that the availability of an alternative remedy does not bar the maintainability of a writ petition if the High Court has entertained and heard it on merits. The court noted that the petitioner could have sought condonation for the delay in filing an appeal, but since the petition was already entertained, it would not be just to dismiss it on this ground. Moreover, the District Judge's refusal to investigate the petitioner's objections was a jurisdictional error, making the petition maintainable under Articles 226 and 227 of the Constitution.

Conclusion:
The court allowed the petition, set aside the order of the District Judge, and remanded the case for investigation of the petitioner's objections and their disposal in accordance with the law. The order of attachment was to continue until the matter was resolved by the District Judge. The parties were directed to bear their own costs, and the security deposit was to be refunded to the petitioner.